Introduction

Long-term auctions use the ascending-clock algorithm. Understanding how this works gives you a way to easily manage your long-term bids.


Summary

  • How long should a yearly auction last?
  • How do I know the starting price for an auction?
  • How do I know if I should also select a balancing group  or a portfolio code when I place a bid?
  • How do I know that my bid has been correctly placed?
  • How long will the first bidding round window stay open for the incoming LT auction?
  • What amount and surcharge values should I enter for my future bids?
  • Is possible to skip one or more bidding rounds and come back at a later point?
  • What is my bidding range for the current small-price-step bidding round?
  • Why do we still have a new big price step after an undersell?
  • What happens if a monthly auction does not finish by the end of the month?





How long should a yearly auction last?

There is no set length of time that a yearly auction will last for.


A yearly auction allocates a lot of capacity, and this is why typically there are many shippers involved in the (bidding) process. 

It is very unlikely that a perfect match between requested and offered ('marketable') capacity occurs in the first bidding round, which lasts 3 hours. 


If there is an overdemand of capacity, the ascending-clock algorithm will start a new bidding round with an increased price based on pre-defined price steps. This will be repeated until the total amount of requested capacity is equal to or lower than the offered amount.


Sometimes, a match between supply and demand does not occur before the beginning of the next scheduled auction for the same time and network points according to the auction calendar. When this occurs, then the first auction will end and the second auction will begin.



How do I know the starting price for an auction?

The starting price of an auction is, as the name suggest, the likely starting price for a given auction, set by the TSO.


In this case, we must differentiate between two instances:

  • Case 1: Unbundled auction.The starting price for the auction is equal to the regulated tariff plus all additional fees set by the TSO.
  • Case 2: Bundled auction. The starting price is equal to the sum of the regulated tariff plus all additional fees set by both TSOs.


(lightbulb)To check the auction starting price, you can select the auction of interest on the platform. Click on the “show details” to display a new screen containing all key information about the auction. 


At the bottom of the screen, in the "Pricing" section, you can find Small and Large price step prices listed along with the Starting price.


Unbundled auction:


Bundled auction:


Sometimes, there are additional fees applicable beyond those published on the PRISMA platform. We recommend checking the respective TSOs' websites for the final starting price.



How do I know if I should also select a balancing group  or a portfolio code when I place a bid?

Each TSO individually decides if capacity bookings for an auction require a balancing group or a portfolio code.

If a balancing group or a portfolio code is required, you will see the following fields when placing your bid:


Balancing group



Portfolio code


How do I know that my bid has been correctly placed?

As a shipper, you have several ways that you can check the bids you have placed. 


  • Once you are logged in, you can click on the “activity” section to see your activities from the last 24 hours.

  



  • Or, you can check which bids have been placed by going to your Activity feed and clicking on the Dashboard link. 

Scroll down the page to find “Your activities in the last 24 hours” and to see a list of all your recent activities.


How long will the first bidding round window stay open for the incoming LT auction?

The first bidding round lasts three hours. Every following round lasts one hour, starting every two hours. 


After a round is finished, the next (1) hour is free to calculate the results of the last bidding round and to give participants time to make or change bids for the next round. 


Example:

1st round: Starts 12.00, finishes 15.00

2nd round: Starts 16.00, finishes 17.00

3rd round: Starts 18.00, finishes 19.00


What amount and surcharge values should I enter for my future bids?

 

The ascending-clock algorithm allocates capacity for long-term auctions. As it is highly likely that there is more demanded than offered capacity, often there will be several rounds to allocate the entire offered amount. 

Each round, the Cost per kWh/h slightly increases.

(lightbulb) Keep in mind that you must bid a higher surcharge in the next round. Also, you are only allowed to bid on less than or the same amount of capacity as for the previous round.


Due to higher prices per kwh/h, each shipper will usually reduce the demanded amount of capacity for each round. Repeating this process several times, a convergence occurs between supply and demand, until the auction is closed and the offered capacity is allocated.


Is possible to skip one or more bidding rounds and come back at a later point?

 

Usually, it is not possible to skip bidding rounds. 


The exception occurs when there is an oversell in the last round you participated in, which led to an increase in costs for the next bidding round. If you do not take part in this next bidding round (due to the higher price), and the total demanded capacity at this price point is less than the offered capacity, then the starting price is decreased and you are allowed to join the bidding process again.


What is my bidding range for the current small-price-step bidding round?

When an undersell occurs in the previous bidding round, a small price step will be applied for the next round.


The bid amount for the small price step should be between the amounts placed for the last two large price steps. This would be between the amount bid for the last round in which an oversell occurred, and the bid amount for the round in which there was an undersell.

If you do not change the capacity amount in your bids for the last two large-price-step rounds, you will only be able to bid the same amount for the small-price-step rounds


Why do we still have a new big price step after an undersell?

Usually after an undersell, a lower surcharge applies for the next bidding round. If an oversell occurs with the lower price, then the price rises again. The starting price is usually lower than the undersell price and higher than the starting price for the latest oversell round. 


The exception is if there is a competing auction scenario. In that case, there is competition between your auction and other auctions for capacity at that network point. Even it looks like there is an undersell in your individual auction, if the total amount of demanded capacity across all competing auctions is greater than the offered available capacity at the network point, then an oversell occurs and large price steps are applied for all competing auctions (including the one you are participating in).


What happens if a monthly auction does not finish by the end of the month?

Monthly auctions typically end before the respective traded capacity starts.

If the auction is still not finished when the gas transport is supposed to start, the monthly auction is cancelled, and all participating TSOs offer the capacity via short-term auctions.